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Investigation of Cardlytics by Faruqi & Faruqi, LLP

Faruqi & Faruqi, LLP, a prominent national securities law firm, has launched an investigation into potential claims on behalf of investors who have incurred losses exceeding $50,000 in Cardlytics, Inc., particularly during the period of March 14, 2024, to August 7, 2024. The firm's investigation comes in light of recent disclosures surrounding Cardlytics’ market performance and allegations of misleading statements made by the company and its executives.

Background on Cardlytics

Cardlytics, a tech-driven marketing platform, operates primarily in the financial services sector. Its services primarily target consumer engagement through digital and financial incentives. However, the company has recently faced scrutiny following significant fluctuations in its stock price and a noticeable decline in revenue.

Recent Developments

On May 8, 2024, the company reported first-quarter revenues that only increased by 8% year-over-year, despite reporting a 12% increase in billings. This lack of corresponding growth was largely attributed to a 20.2% rise in consumer incentives, which subsequently alarmed investors. Following this announcement, a sharp decline in share price was observed; Cardlytics shares dropped by $5.33, equating to a staggering 36.5% decrease.

Furthermore, on August 7, 2024, the firm released its second-quarter financial results, indicating a 9% year-over-year decrease in revenue amounting to $69.6 million. The results also disclosed a significant decline in adjusted contribution, revealing troubling signs of the company’s financial health. In addition to the disheartening financial report, the announcement included the resignation of CEO Karim Temsamani from both his position and the board of directors. This news precipitated another dramatic decrease in share price, which fell by 57.1% to close at $2.96 on August 8, 2024.

The Allegations

The heart of the investigation revolves around claims that Cardlytics and its executives may have violated federal securities laws by making false or misleading statements. The allegations suggest that the company did not sufficiently disclose critical information including:

• - An increase in consumer engagement leading to heightened consumer incentives, and the inability to align this growth with increased billings.
• - A significant risk of slowing or declining revenue growth, which was not sufficiently communicated to investors.
• - Changes to the Average Daily Engagement metric, resulting in a failure to meet budget expectations.

These omissions and misleading statements contributed to materially false impressions about the company's business prospects. Investors who acted upon these representations may have done so without the knowledge needed to make informed decisions, leading to severe financial losses.

Call to Action

Faruqi & Faruqi encourages any investors who have suffered losses to reach out for guidance regarding their rights and options. A crucial deadline of March 25, 2025, is quickly approaching for those interested in pursuing a lead plaintiff role in a federal securities class action against Cardlytics. As per the firm’s communication, potential lead plaintiffs are essential for directing litigation efforts on behalf of the class and could make a significant impact in the pursuit of justice for all affected investors.

As Faruqi & Faruqi continues this investigation, they urge anyone with information related to Cardlytics’ business practices to come forward. This includes whistleblowers, former employees, and shareholders who can contribute valuable insights.

Investors or interested parties can get in touch with Faruqi & Faruqi directly at 877-247-4292 or visit their official website for more details on the ongoing investigation and class action lawsuit. Additionally, regular updates will be provided on various social media platforms, ensuring transparency during this critical period.

Conclusion

The actions of Cardlytics, coupled with the misrepresentation of its financial health, have serious implications for the investor community. As far-reaching consequences unfold, affected parties are encouraged to seek legal counsel and explore potential avenues for recovery. Faruqi & Faruqi, LLP stands ready to assist those who have been impacted significantly by these developments.